Falcao’s representatives have indicated the 27-year-old would demand a wage package worth at least €290,000-a-week after holding informal talks with the two Premier League sides as well as big-spending Paris Saint-Germain.

Real Madrid are also understood to be interested in the Colombian but Atletico are unlikely to sell their star player to their city rivals, even though his agent Jorge Mendes also represents Jose Mourinho.

Goal.com revealed in November that Chelsea had hoped to activate the £51.7m (€60m) release clause in Falcao's contract during the January transfer window, but the player opted to stay in the Spanish capital until the end of the season.

Chelsea were confident of pushing through a summer deal but face a challenge to qualify for next season’s Champions League while Falcao is happy to take his time before making a decision. The player has become a personal target of Blues owner Roman Abramovich with £50m Fernando Torres continuing to flounder at Stamford Bridge.

The Blues are understood to have indicated they will meet Falcao's demands but will face competition from City if the Premier League champions offload Edin Dzeko or Carloz Tevez in the summer transfer window.

"Falcao's people know they have all of the big fish on the hook ahead of the summer and are looking to take advantage of it," a source told Goal.com.

Manchester United duo Robin van Persie and Wayne Rooney are currently the highest paid players in the Premier League on deals, including image rights, worth around €290,000-a-week.

Falcao, who is learning English, has been in stunning form ever since moving to Europe to sign for Porto from River Plate in 2009.

He moved to Atleti for €40m in 2011 and has scored 63 goals in 80 appearances for the club, including 27 goals so far this season.